Delta Air Lines CEO Ed Bastian has warned that travelers may continue to face high airfare costs, even as oil prices decline from their recent peaks. Bastian expects this trend to help Delta achieve its annual profit goals. He indicated that robust demand for travel, coupled with a cautious approach from the industry regarding capacity expansion as fuel prices drop, makes elevated ticket prices sustainable.
While domestic and international airfares have seen a decrease from their highs in April and May, consumers are still paying significantly more than they did last year. This increase is attributed to rising jet fuel costs, exacerbated by geopolitical events, which have substantially increased operating expenses for airlines. According to recent Kayak data, the average domestic airfare reached $366, a 38% increase year-over-year, and the average international ticket, while falling below $1,000, remained 24% higher than in 2025.
These expectations for sustained elevated fares supported Delta's reaffirmation of its full-year earnings per share forecast, projected between $6.50 and $7.50. For the third quarter, the airline anticipates earnings per share between $2 and $2.50, surpassing analysts' expectations of $2.02. Delta's second-quarter results revealed adjusted earnings per share of $1.56, exceeding the expected $1.48, with revenue reaching $17.67 billion, above the forecast of $17.53 billion.
Bastian noted that Delta, currently the most profitable U.S. airline, has benefited from catering to higher-income customers in a K-shaped economy, where wealthier individuals continue to spend while lower-income consumers reduce spending. The airline's premium seat sales generated $6.92 billion in the second quarter, nearly matching the $6.85 billion from main cabin sales. Delta is looking to capitalize on this demand for premium offerings by increasing seating options, recently launching "basic fares" for first-class and business seats that include select perks typically reserved for members.
The airline's strong profits were also bolstered by higher-than-expected demand from the World Cup and a surge in corporate travel. Jet fuel constitutes a significant portion of airline operating costs, and global carriers have experienced soaring prices due to supply disruptions. In response, airlines have reduced routes, particularly long-haul flights, increased airfares, and added fees for services like checked bags and seat selection. However, industry executives suggest that the full impact of higher fuel costs has not yet been passed on to consumers.
Bastian stated that Delta has passed approximately 60% of the increased costs to consumers, with plans to reach 100% this quarter. In the second quarter, Delta's revenue per available seat mile increased by 17% year-over-year, though costs per available seat mile rose by 21%. Net income decreased by 25% to $1.66 billion ($2.44 per share), while operating revenue grew by 19% to $19.76 billion. Delta also maintains other revenue streams, including cargo, a fuel refinery, and a maintenance and repair division.